The Wolf Den #625 - A Rant On Rumors And Truth
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In This Issue:
A Rant On Rumors And Truth
Bitcoin Thoughts And Analysis
Legacy Markets
Binance Launches $1 Billion Dollar Recovery Fund
Cathie Wood Is Still A Mega Bull
Can America Go Bankrupt? | James Lavish
My Recommended Platforms And Tools
A Rant On Rumors And Truth
I am going to let off a bit of steam.
One of the common symptoms of a bear markets is an endless slew of unsubstantiated rumors and FUD. The amount of falsehoods vary, but there is always a raw pile of trash to dig through when bears are in control.
Remember when MicroStrategy was on the brink of a forced Bitcoin liquidation in September?
They are still here.
Remember when Ava Labs was accused of forming an illegal relationship with Roche Freedom in an effort to harm competitors?
That wasn't true.
Remember when the crowd was sure that Coinbase was about to go bankrupt because they cut back on their affiliate program and let go of 18% of their workforce?
Coinbase is still chugging along.
These apocalyptic stories are now buried deep in the garbage bin under a heap of newer trash.
And it is clear that the more we focus on a story, the more the crowd believes it to be true.
I do admit that some rumors can be helpful. They inspire the search for truth. But spreading rumors for clout and clicks needs to stop. The end result is that the diligent investor is tasked with tediously sorting fact from fiction. This is nearly impossible in today's climate.
How do we solve this problem?
We need to turn shaky rumors into reasonable questions.
If someone has a hunch that something foul is afoot based on a shred of evidence or intuition, then that should spark an investigation without drawing immediate conclusions.
I racked my brain for roughly 30 seconds and came up with a quick list of rumors that have been circulating.
“Your Ethereum will never unstake.”
“Grayscale is about to collapse.”
“Solana’s blockchain was manipulated by VCs and FTX.”
“CZ is as much of a criminal as Sam.”
"Crypto.com is next."
This is not a treatise on the veracity of rumors. It's an indictment on the way we present ideas as fact. Some of the above statements may very well turn out to be true, but that does not make it appropriate for fear mongers to start at their half baked conclusion and reason backward in favor of the desired outcome.
There’s a huge difference between inquiring into the Ethereum withdrawal timeline and stating that "withdrawals will never come." There'a an even bigger difference between asking the appropriate questions based on the evidence and constructing a narrative to prove the final assumption. We know how ruthless the mainstream media is. Why give them the fuel they need to light us on fire?
Drawing immediate conclusions makes for great clickbait headlines, but it does the crypto space no favors.
If we want to survive this bear market, then we need to do a better job of prioritizing the truth. It is essential that we continue to ask appropriate questions without drawing inappropriate conclusions before presented with hard evidence.
I have NOT been perfect in this regard. Nobody has. But you can count on this newsletter to always start with the questions first, then work towards the conclusion.
More importantly, if you invest responsibly, do the homework, and custody your own assets, then eventually it won't even matter if the rumors were true. They are simply short term noise, not long term signal.
Crypto is here to stay.
Bitcoin Thoughts And Analysis
WEEKLY CHART
Bitcoin volatility has been reduced to almost nothing. The past few weeks have seen Bitcoin printing indecisive doji candles, with tiny bodies and wicks on both the top and bottom. This is a sign of a pause in the market as bulls and bears are unable to advance their causes. Volume has also been decreasing, meaning we have very little signal as to what comes next.
The bias for the next move in this situation would naturally lean towards more downside, because it is low volume consolidation after a sizable drop.
Price continues to hold support at $16,218.
Let's see what the week has in store for us. For now, not much to report.
Legacy Markets
China
"Shares slid and oil tumbled as growing unrest in China over Covid restrictions sent a shiver through global markets. The dollar steadied after strengthening in the risk-off mood while Treasuries rose.
The unrest in China complicates expectations of the country’s path to reopening, which -- along with prospects of more moderate Federal Reserve interest-rate increases -- had buoyed sentiment toward riskier assets in recent sessions. Traders also assessed the chances that China may exit its Covid Zero policy earlier than previously thought.
“The Chinese reopening won’t be a piece of cake -- it looks like the Chinese economy may further suffer, either from endless and pointless lockdown measures, or from a severe health crisis,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note.
Fed Focus
Since the Fed’s latest meeting, investors have parsed a bevy of economic data that somewhat eased inflation concerns, further strengthening the case for smaller rate hikes.
The S&P 500 notched a weekly gain of 1.5% that took the index to the highest level since early September. The Nasdaq 100 also eked out a gain for the week.
All eyes will be on the US jobs report this week and on Fed Chair Jerome Powell and New York Fed President John Williams, who are among central bank officials scheduled to speak.
Strategists at Goldman Sachs Group Inc. and Deutsche Bank said stock markets are in for a wild ride next year as they don’t yet reflect the risk of a US recession.
Key events this week:
Fed’s John Williams speaks, Monday
Fed’s James Bullard MarketWatch interview, Monday
ECB’s Christine Lagarde addresses European Parliament committee, Monday
Euro area economic confidence, consumer confidence, Tuesday
US Conference Board consumer confidence, Tuesday
EIA crude oil inventory report, Wednesday
China PMI, Wednesday
Fed Chair Jerome Powell speech, Fed’s Michelle Bowman Lisa Cook speak, Wednesday
Fed releases its Beige Book, Wednesday
US wholesale inventories, GDP, Wednesday
S&P Global PMIs, Thursday
US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday
Fed’s Lorie Logan, Michelle Bowman, Michael Barr speak, Thursday
BOJ’s Haruhiko Kuroda speaks, Thursday
US unemployment, nonfarm payrolls, Friday
Fed’s Charles Evans speaks, Friday
ECB’s Christine Lagarde speaks, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.9% as of 10:20 a.m. London time
Futures on the S&P 500 fell 0.9%
Futures on the Nasdaq 100 fell 1%
Futures on the Dow Jones Industrial Average fell 0.6%
The MSCI Asia Pacific Index fell 0.6%
The MSCI Emerging Markets Index fell 1.1%
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.7% to $1.0464
The Japanese yen rose 1.1% to 137.63 per dollar
The offshore yuan fell 0.2% to 7.2076 per dollar
The British pound was little changed at $1.2099
Cryptocurrencies
Bitcoin fell 2.2% to $16,200.63
Ether fell 3.8% to $1,169.51
Bonds
The yield on 10-year Treasuries declined one basis point to 3.66%
Germany’s 10-year yield was little changed at 1.98%
Britain’s 10-year yield declined two basis points to 3.10%
Commodities
Brent crude fell 3% to $81.14 a barrel
Spot gold rose 0.4% to $1,761.65 an ounce"
Binance Launches $1 Billion Dollar Recovery Fund
Binance is raising $1 billion to invest in distressed crypto assets. Named the Industry Recovery Initiative (IRI), the IRI is a collaborative attempt between major industry players to co-invest in the future of Web3.
In an effort to be transparent, Binance has set up a public address for the funds and has gained the support of notable names like “Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos and Brooker Group.”
In eye opening news, over 150 companies have already submitted applications to receive support from the IRI. A lot of projects are desperate for help.
The IRI's goal is not to save “bad” companies. For context, CZ has said, “don’t perpetuate bad companies. Let them fail. Let other better projects take their place, and they will.”
The last time an exchange owning billionaire offered up billions to bailout the industry, things went south. Assuming we aren't being fooled again, this is an honorable effort by Binance that deserves more media attention than it has received. Unfortunately, FUD sells better.
For those curious, the public address for Binance’s initial commitment of is: 0x043a80999cEe3711D372FB878768909fbE7F71E6
Cathie Wood Is Still A Mega Bull
Ark Investment founder and CEO Cathie Wood believes Bitcoin could top $1 million per coin by 2030.
Cathie Wood still believes that Bitcoin could reach $1M per coin by 2030.
In a recent Bloomberg interview, Wood made a few additional points worth discussing.
"Battle tests are necessary to prove the thesis.”
Global adoption is only possible if Bitcoin continues to prove its resilience. I agree.
Wood believes that institutions will eventually do the work and “move into Bitcoin and perhaps Ether as a first stop because they’ll understand it more.” Hard to disagree.
She also dismissed the notion that the FTX calamity is worse than the Bernie Madoff Ponzi scheme. “Many people are saying, is this another Lehman, could we see a domino effect here? The banking system back in 2008-09 [was] trillions and trillions of dollars. Right now it seems FTX [owes] $US5-10 billion to creditors. Lehman was $US1.2 trillion in claims. Madoff was $US64 billion in claims.”
Fair point.
Can America Go Bankrupt? | James Lavish
If you’ve never heard of a 'debt spiral', it’s time you did. America may already be in one, and there’s no turning back now.
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.
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